LITERATURE REVIEW RESEARCH METHODOLOGY ANALYSIS AND DISCUSSION

iv TABLE OF CONTENT PAGE DECLARATION APPROVAL APPROVAL DEDICATION ABSTRACT i ABSTRAK ii ACKNOWLEDGEMENTS iii TABLE OF CONTENTS iv LIST OF TABLES vii LIST OF FIGURES ix LIST OF APPENDICES xi LIST OF ABBREVATIONS xii LIST OF SYMBOLS xiii LIST OF PUBLICATIONS xv CHAPTER 1. INTRODUCTION 1 1.1 Background 1 1.2 Imbalance Coordinated Lot Sizing Decision 3 1.3 Impact of Lot Sizing Decision into Transportation Cost 5 1.4 Problem Statement 8 1.5 Research Questions 9 1.6 Research Objective 10 1.7 Research Limitation 10 1.8 Thesis Outline 11

2. LITERATURE REVIEW

13 2.1 Basic Joint Economic Lot Size Model 13 2.1.1 Single Supplier-Purchaser Supply Chain 13 v 2.1.2 Multiple Actors in Supply Chain 19 2.2 Inventory Problem with Transportation 23 2.3 Information Sharing 28 2.4 Cost Parameter 30 2.5 Shortcoming of Previous Research 32 2.6 Summary 35

3. RESEARCH METHODOLOGY

36 3.1 Overall System 36 3.2 Research Design 37 3.3 Model Development 39 3.4 Conceptual Model 42 3.5 Mathematical Model 45 3.5.1 Supplier Cost Function 46 3.5.2 Transportation Cost Function 50 3.5.2.1 Inverse Function 51 3.5.2.2 Adjusted Inverse Function 52 3.5.3 Purchaser Cost Function 52 3.5.3.1 Simple EOQ Model 53 3.5.3.2 EOQ-I Model 55 3.5.3.3 EOQ-A Model 56 3.5.4 Simple JELS Model 57 3.5.5 JELS-I Model 62 3.5.6 JELS-A Model 66 3.5.7 Validation Method 70 3.5.8 JELS-L Model 72 3.6 Model Comparison 75 3.7 Summary 80

4. ANALYSIS AND DISCUSSION

81 4.1 Numerical Example 81 4.2 Independent Decision 83 4.2.1 Simple EOQ Model with Freight Rate 84 vi 4.2.2 EOQ-I Model with Freight Rate 85 4.2.3 EOQ-A Model with Freight Rate 86 4.3 Coordinated Decision 89 4.3.1 Simple JELS Model with Freight Rate 89 4.3.2 JELS-I Model with Freight Rate 93 4.3.2.1 Incapacitated Problem for JELS-I Model 93 4.3.2.2 Capacitated Problem for JELS-I Model 97 4.3.2.3 Sensitivity Analysis of JELS-I Model 98 4.3.2.4 Effect of the Distance d on Joint Total Cost and Transportation Cost of JELS-I Model 104 4.3.3 JELS-A Model with Freight Rate 107 4.3.3.1 Incapacitated Problem for JELS-A Model 107 4.3.3.2 Capacitated Problem for JELS-A Model 110 4.3.3.3 Sensitivity Analysis of JELS-A Model 112 4.3.3.4 Effect of the Distance d on Joint Total Cost and Transportation Cost of JELS-A Model 118 4.3.4 JELS-L Model with Freight Rate 120 4.3.4.1 Incapacitated Problem for JELS-L Model 121 4.3.4.2 Capacitated Problem for JELS-L Model 125 4.3.5 Model Comparison Analysis 126 4.3.5.1 Comparison Independent Decision and Coordinated Decision 126 4.3.5.2 Comparison of JELS Proposed Models to The Best Solution 130 4.4 Summary 142

5. CONCLUSION AND FUTURE WORK